Debt Free Destiny

It is Labor Day. If you are lucky enough to have this day off (yes many people do work on Labor day to supply the rest of us with services) take the time to relax, enjoy your friends and family and gatherings. For many of us, this day signifies an end to the summer.

Football season is starting. And for some (I’ve never met these people) the lazy days of summer are soon over and it’s time to get busy.

How about working on your family budget? Sounds like fun right? Well not for most people, however it is certainly a useful tool in keeping you family on track regarding money and spending habits. Here are a few simple tips to get you moving in the right direction.

1. TRACK SPENDING - Before you can make a realistic budget for your family to work with, you will have to have a clear understanding of how much money you have to work with and where you are spending it. For the next three months, keep track of your daily expenses. This step is essential for both you and your partner to get an idea of where your money is going. Most people are amazed at how much money we get in the “habit” of spending. You may want to keep a journal or a spreadsheet to help you keep track of your spending.
2. ACCOUNT FOR OBLIGATIONS - Since you are already keeping track of your daily spending, now is a good time to figure out your monthly obligations, such as your rent, car note, credit card and other debt. Be sure to include all reoccurring monthly expenses, such as electric, cable and phone. If you are billed quarterly for things such as water, or car insurance, determine the amount needed for each month.
3. EVALUATE FINANCES - You can now evaluate where your money is going and were you may be able to save money each month. With your money accounted for, and a figure of what you must pay each month, calculate a budget to ensure all bills are paid on time each month. This may require moving things around, perhaps your car note and mortgage are each due at the beginning of the month. You should try to get one paid in advance so that you can make those payments out of different paychecks. It is ideal to pay roughly the same amount out of each check, so you are not spending excess one week only to be scraping by the next.
4. GET TO YOUR GOAL - Pay attention as you work on this new budget. If you find you have trouble meeting payments on certain dates, you can call your creditor to see if they can accommodate you by changing due dates. The goal is to not only have the money when the bills are due, but preferably in advance. Don’t forget to “schedule” a payment for savings. If you treat it as a payment you are more likely to put the money back instead of spending it.

For most people setting up a budget is not that difficult. It requires some time and commitment in getting the correct data to work with, but this in itself is not very hard. The difficulty is in sticking to the budget. Once you are able to stick to the budget you will likely find paying the monthly bills are not as stressful since you already have a plan in place to pay them.